Recessions are hard times. People lose their jobs, companies face the threat of shutting down, and the lucky ones take the losses from their cash reserves. So, it might sound strange when you are told that the best time to start your business is during recession. If you’re a Nigerian, the best time to start your business might be now, this moment when the country has been declared to be in recession.
Regardless of what people around you (including the media) may say, there’s no better time than right now to get going and start pursuing your business dreams, in anticipation of the next period of growth. Many world renowned businesses were started during recession, and you can join the list.
Here are a few reasons you should start your business in the face of an economic downturn:
You Can Hire Great Talent
As opposed to good times when it’s easy to secure funds and grow your business rapidly, finding the best talent to work with your startup is easier during recession.
During this time, it’s common to find companies laying off staff, even the best talents. So, no matter the industry you are, you’ll always find highly qualified, talented and effective individuals who are looking for the next opportunity.
People are Seeking Innovation
Recessions create problems. They also slow investment in innovation down. Consumers are looking for solutions to problems, Many companies are desperate to find new partnerships with new companies that have a different, better or more innovative way of delivering products and services.
This presents an opportunity were you can come in and solve problems. Even if your prices are higher, if you can come in with greater value, you have a good chance at winning new business.
People Want to Save Money
As a startup trying to defy the norm and grow your business during recession, you should be able to undercut your competitors. Their clients will be watching their wallets and looking for cheaper alternatives, so it’s the perfect time to make a sales pitch to win them over. Do a good job, and you’ll keep those clients when the economy recovers.
Recession Gives you Negotiating Power
When the economy is strong, a startup is just another startup, and the vendor sets the rules. On the other hand, when the economy is weak, traditional vendors have trouble moving product.
If your company depends on products from suppliers, a downturn is a great time to negotiate or renegotiate a deal that will benefit you even after recession ends.
You will Have Less Competitors
During the good times, it’s common to find many people wanting to be startup founders. Many budding entrepreneurs go straight for funding and eventually take the bootstrappers out of business.
In a downturn on the other hand, there are less people trying to startup because there’s less funding. This makes it easier for you who is starting with your personal funds, and do not who want to control ownership in your startup.
If you’re still having second thoughts about taking the bold step to start your business during a time like this, see how top CEOs were able to successful launch their businesses during recession.
Did you find these tips helpful? Let us know in the comments!